Marketing & Sales Big Data, Analytics, and the Future of Marketing & Sales March 2015 3McKinseyonMarketingandSales.com @McK_MktgSales Table of contents Business Opportunities Insight and action How to get organized and get started 8 Getting big impact from big data 16 Big Data & advanced analytics: Success stories from the front lines 20 Use Big Data to find new micromarkets 24 Smart analytics: How marketing drives short-term and long-term growth 30 Putting Big Data and advanced analytics to work 34 Know your customers wherever they are 38 Using marketing analytics to drive superior growth 48 How leading retailers turn insights into profits 56 Five steps to squeeze more ROI from your marketing 60 Using Big Data to make better pricing decisions 60 Marketing’s age of relevance 72 Gilt Groupe: Using Big Data, mobile, and social media to reinvent shopping 76 Under the retail microscope: Seeing your customers for the first time 80 Name your price: The power of Big Data and analytics 84 Getting beyond the buzz: Is your social media working? 90 How to get the most from big data 94 Five Roles You Need on Your Big Data Team 98 Want big data sales programs to work? Get emotional 102 Get started with Big Data: Tie strategy to performance 106 What you need to make Big Data work: The pencil 110 Need for speed: Algorithmic marketing and customer data overload 114 Simplify Big Data – or it’ll be useless for sales 54 McKinseyonMarketingandSales.com @McK_MktgSales Introduction Big Data is the biggest hame-changing opportunity for marketing and sales since the Internet went mainstream almost 20 years ago. The data big bang has unleashed torrents of terabytes about everything from customer behaviors to weather patterns to demographic consumer shifts in emerging markets. The companies who are successful in turning data into above-market growth will excel at three things: ƒ Using analytics to identify valuable business opportunities from the data to drive decisions and improve marketing return on investment (MROI) ƒ Turning those insights into well-designed products and offers that delight customers ƒ Delivering those products and offers effectively to the marketplace. This goldmine of data represents a pivot-point moment for marketing and sales leaders. Companies that inject big data and analytics into their operation show productivity rates and profitability that are 5 percent to 6 percent hight than those of their peers. That’s an advantage no company can afford to gnome. This compendium explores the business opportunities, company examples, and organizational implications of Big Data and advanced analytics. We hope it provokes good and useful conversations. Please contact us with your reactions and thoughts. David Court Director David headed McKinsey’s functional practices, and currently leads the firm’s digital in.